The Portland daily press., 1887-05-20
JAY GOULD EXPLAINING.
He Tells the commission More About
Union Pacific Affairs.
Testimony Regarding the Provisions
of the Consolidated Mortgage
Trusts.
Gould and Friends Did Not Have Con-
troll of the Union Pacific Stock.

New YoRK, May 19.-When the Pacific
Railway Commission got to work this morn
ing. Jaw Gould resumed the witness stand,
and the inquisition was continued by Com
missioner Anderson. Mr.. Gould testified
that the provisions Of the consolidated mort
gage trusts were strictly complied with by
the trustees and the bonds issued as therein
provided. He was shown transcript of
transactions in the consolidated bonds fur
nished by the Union Pacific Company, which
would seem to indicate that the trustees had
not followed the trust. Mr.. Gould said that
was Union Pacific account of which he
knew nothing; that the true way to get at
the matter was to examine the accounts Of
the trustees kept by Mr.. Calef, who could be
got to make the necessary explanation. "The
trustees only charged the amounts named in
the mortgage; the accounts you show are of
negotiations with the Union Pacific, and
they could get their own prices. You will
find that the, accounts Of the trustees will
balance with the-1nsHtsAss--- MAXWELL and
Graves, to whom many Of these bonds were
issued, were the brokers of st. Louis party
who had refused to convert his bonds. My
explanation of the transactions with these
brokers is that the Union Pacific had ac-
quired title in the bonds from the next trus-
visions of the mortgage prohibit the acquire
ment of the bonds of the trust by the
Kansas Pacific, and the trustees would GER
talnly treat the successor company, the
Union Pacific, as though it wers the Kansas
Pacific. Where the commission is mixed up
is that it is trying to get at the dealings of
the trustees through set of accounts of the
Union Pacific which the trustees had nothing
to do with. The trustees dealings were not
entirely with the Union Pacific, but the price
M CO hlrla hat hold
would not convert, and the Union Pacific
went on the market and purchased them for
conversion at the best prices they could. My
recollection is that the bonds bought by Mr..
Sage and myself were secured from the
Union Pacific. never dealt in any of these
securities underlying the trust. | put them
In at the rate mentioned, and my books will
show this fact"
Mr.. Anderson said that he could not in
quire intelligently with reference to the
commission OF these trusts and securities
without the accounts kept by Mr.. Calef. Mr..
Gould gave Sergeant-at Arms Walsh a note
directing Mr.. Calef to appear before the
commission with the books showing the
issue Of the bonds.
Commissioner Littler here assumed the
character and duties of inquisitOr. The
total indebtedness of TIE Union Pacific Rail-
road Company Dec. IA, 1879, was SSS, ,472-
391.10, consisting of the various issues of
bonds. Tbs outstanding issues of stock at
!
ness of the Kansas Pacific at that time was
$50, ,162, 1880. The stock was SO, 500, $50, and
the stock of the Denver Pacific $4,000,O00.
My holdings with Union Pacific were So, 700,-
600 stock and 81, 100000 of bonds. did not
hold a controlling interest at that time; |
had S4,000,000 Kansas Pacific stock and
about $3,000,000 in bonds. owned the Mis-
souri, Pacific at that time. By releasing the
S3,000,000 in Denver Pacific bonds we made
the consolidated mortgage for 100000 less.
The outstanding consolidated bonds today
are SIG, 10000. When all Of the underlying
bonds have been converted the trust will
have issued all of the consolidated bonds.
The Union Pacific Railway Company be-
came the owner of the S4,O0O,0O0 Denver
Pacific stock by the consolidation and issued
S4,000,000 of its own stock in place of it.
They used SO, ,464, ,16S of this stock to pay me.
The only effect of the issuing of this stock
was to increase the indebtedness Of the
Union Pacific, and the Denver Pacific stock
is not an important factor in the matter of
this investigation, for that Indebtedness
could have been made just as well without
reference to them at the time of consolida-
ti0n. i was the owner of the Kansas Pacific
controlling interest and was in a position to
dictate the terms of the consolidation MY
holdings in Kansas Pacific at the time
amounted to $3,15Ss674. / didn't lose any
money by the consolidation, nor did / make
any, for the securities were worth Just
as much before as after the Consolidation.
The Indebtedness of the consolidated road
was $124,2 900 and the stocks $50, ,653, 200.
The object of the directory in changing the
name of the Union Pacific Railroad Com
pany was because it was a new child and to
avoid mixing of accounts. My friends and
| did not own controlling in the stock of
the Union Pacific.